Kayem Foods

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Kayem Foods, Inc.: Al Fresco Chicken Sausage
Case Questions, Group Two

1. Provide a brief SWOT analysis for Kayem Foods, Inc. (specifically addressing the market opportunity for Al Fresco Chicken Sausage).

STRENGTHS
• Kayem owns other brands that have been acquired and retained due to regional brand loyalty. • Kayem brands are known for freshness and high quality. • Taste tests show that consumers consider Kayem products to be equivalent in taste and quality to leading brands. • Al Fresco Chicken Sausage is seen to be a part of a healthy lifestyle. • Buzz marketing put Al Fresco in the number one market share spot for Chicken Sausage. • Kayem brands are strong at the deli counter because of freshness and quality.

WEAKNESSES
• Not a lot of funds available for marketing, compared to competitors. • Kayem products do not currently have any distinguishing characteristics in the market place. • There have been no major marketing awareness campaigns for the Al Fresco name yet. • Retailers are reluctant to give a relatively unknown brand much shelf space. • Kayem’s profit margins have been eroding recently because of supermarkets gaining the power to demand greater discounts and promotional allowances. • Kayem has a relatively weak bargaining position as a brand with retailers and shop owners.

OPPORTUNITIES
• 80% of Kayems sales volumes have been at deli counters. This leaves opportunities to expand the brand’s presence in the refrigerated and frozen isles of the grocery stores. • Sausage sales as a dinner option are rising with the fastest growing segment being specialty sausage. • Low fat and lean sausage sales are also growing fast. • Americans in the South buy more sausage, this is a market share that Kayem has not yet broken into in a significant way. • Consumer markets indicate that a “demand brand” of sausage would do well. Kayem has an opportunity to fill that market need with its Al Fresco variety of flavors and low fat chicken sausage products.

THREATS
• In the nation-wide market, here are three large brands who dominate the sausage market: Hillshire Farms, Johnsonville, and Ball Park. • Customers who were introduced to the product through Buzz Marketing are having a very difficult time finding the product in local stores. • Supermarket executives have been unimpressed with the buzz campaign and are unwilling to increase buying for the brand based on the results of the buzz campaign. |Factors |Strengths |Weaknesses | |Management |100 years of success | | |Offerings |60% of products sold under several brand names |Some products to not have distinguished | | |High quality of Fresh delicatessen meats, hot dogs |characteristics | | |and sausages |Genoa sausage = commodity product | | | |Sold/priced certain brands aggressively below at a | | |Entered packaged meat sector |substantial discount. | |Manufacturing |Experienced success as a processor & distributor. |Price competition from other manufacturers, | | |Distributes to other manufacturers/ private labels | | |Consumer/ Social...
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